HOW KNOWLEDGE ASSETS AFFECT PROFITABILITY AND MARKET VALUE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The study examines the impact of knowledge assets on profitability and market value of listed deposit money banks (DMBs) in Nigeria for the period 2015 to 2021. Thirteen listed DMBs with reporting currency in Naira were used for the study. The total firm year for the study is 91. Multiple regression analysis was used as instrument of analysis. Chow test and Hausman test were conducted to determine the appropriate regression model. Results show that Value Added Intellectual Coefficient (VAIC) has a positive effect on market value and profitability of DMBs in Nigeria. The individual components, human assets efficiency (HAE) and structural assets efficiency (SAE) were found to have a positive effect, while total assets efficiency (TAE) has a negative impact on market value of deposit money banks in Nigeria. VAIC was found to have a positive effect on profitability of deposit money banks in Nigeria. With the consideration of the individual components, HAE and SAE have a positive effect on return on assets (ROA) and return on equity (ROE) but a negative effect on revenue growth (RG). TAE has a negative effect on ROA and ROE with a positive effect on RG of DMBs in Nigeria. To improve their profitability and thus their market value, deposit money banks are advised to step up development and training of their human resources, structures and processes, through the development of information technology, and customer relationship management.